Yahoo lays off hundreds as it shuts down operations in China

Yahoo said it is consolidating operations at many of its offices, including its Sunnyvale headquarters.
Yahoo

Yahoo is closing its office in China, the company confirmed Wednesday, a move that is expected to eliminate up to 300 jobs.

Yahoo employees based in the Beijing office were informed of the closure on Wednesday, a spokeswoman said. Yahoo offered no local products in China, and the office -- Yahoo's only physical presence in mainland China -- served as a research and development center.

"We are constantly making changes to realign resources and to foster better collaboration and innovation across our business," Yahoo said in a statement. "We will be consolidating certain functions into fewer offices, including to our headquarters in Sunnyvale, Calif."

Yahoo did not say how many employees were affected by the office's closure, but a source described as familiar with the matter told Bloomberg that the office employed 200 to 300 people. Yahoo counted 12,500 employees worldwide at the end of 2014, meaning the closure affects about 2 percent of its global workforce.

The closure comes amid increasing pressure to reduce expenses from investors, including activist investor Starboard, which has strongly suggested that Yahoo CEO Marissa Mayer cut at least $500 million in expenses. The company has cut about 600 jobs in the past six months, mostly at operations in Canada and India.

Yahoo has had a sometimes rocky experience in China. In 2007, the company settled a lawsuit brought by two journalists that accused the web portal of supplying the Chinese government with information that led to 10-year prison sentences. Lawmakers and human rights activists criticized Yahoo, which denied responsibility, saying it was merely complying with Chinese law.

The closure comes about a month after the Chinese government announced new rules that would require foreign-based tech companies to hand over source code, submit to audits and build deliberate back doors into both hardware and software products. The new rules, due to go into effect this month, were criticized by the Obama administration as a "major barrier" to trade and an open market.